Homeowner insurance cost hikes grind to near stop in September, latest data shows

After a long run, home insurance price increases in Florida slowed to a near halt between August and September, raising the question: Now will prices go down?

Statewide average costs for all-perils coverage of owner-occupied homes increased by $1 between August and September, from $3,747 to $3,748, according to the South Florida Sun Sentinel’s analysis of the most recently released insurance cost data from the Florida Office of Insurance Regulation.

That comes out to an increase of 0.03% — or less than a tenth of a percentage point. It’s the lowest increase since the state began releasing its Residential Market Share Reports on a monthly basis earlier this year.

Since January, premium costs have increased by 1.5% and average premiums jumped from $3,691 to $3,748.

Of course, South Florida homeowners don’t expect to pay those prices. Premiums in the region have long remained higher than the remainder of the state, due to its higher density, higher housing costs, and resulting higher costs posed by the threat of a major hurricane.

Premiums closer to statewide averages can be found in the central region of the state, including the Tampa and Orlando areas, while homes in northern inland counties can typically be insured for below-average prices.

The data also shows:

— Personal residential insurance costs for condominium owners were unchanged at an average $1,779 between August and September. That followed a .1% decrease between July and August. Between January and September, average costs for condo unit coverage increased 1.3%, from $1,756 to $1,779.

— Average costs of dwelling/fire coverage — originally a policy geared toward landlords that an increasing number of homeowners have selected to reduce costs — increased by .3% between August and September and by 2.7% since January. At a statewide average of $2,730, those who opt for dwelling/fire coverage can save more than $1,000.

— Average costs for homeowner policies decreased for 38 of 88 state-regulated insurers that supplied data for both August and September. Seven were unchanged. Of the 43 with cost increases, only eight exceeded 1%.

Reducing renewal costs for Citizens takeouts

Newcomer Patriot Select reduced its average premium by 11.3% as its policy count increased from 138 in August to 669 in September.

John Rollins, CEO of Patriot Select, said the decrease is largely a result of the company’s strategy of building its initial book of business by taking policies out of state-owned Citizens Property Insurance Corp.

Companies that participate in Citizens’ depopulation program — which entails taking over Citizens policies in the middle of contract periods — are forbidden from increasing premiums that customers were paying Citizens until their annual contract expires.

Citizens’ coverage is significantly less expensive than coverage from private market insurers, so a lot of takeouts could quickly reduce a private company’s average prices.

Citizens customers are barred from remaining with the company if any private market insurer offers a policy projected to renew at a cost of up to 20% over the customers’ current Citizens policy.

October and November reports will show that Patriot Select gained an additional 12,747 policies from Citizens, Rollins said. While June takeout customers were told their Patriot Select renewals would cost 15% more than their Citizens’ policies, the company later reduced its renewal costs “to roughly match Citizens’ rate levels for the October, November and December takeouts,” Rollins said.

Rollins said the company was able to reduce its renewal premiums for its Citizens takeout customers because non-catastrophe claims and litigation have declined across the industry in Florida, thanks to reforms enacted in 2022 and 2023.

Will premium costs start heading down?

Whether the overall halt in insurer price increases will be followed by a sustained trend toward reduced prices won’t be known for a few months.

With continuing inflation of materials and labor elevating rebuilding costs, experts don’t expect a return to price levels that were in place in 2022 and 2023.

September’s $3,748 statewide average homeowner premium was still 34% higher than the average premium of $2,798 reported shortly after the state Legislature enacted its first set of reforms in May 2022.

Yet, Shiloh Elliott, spokeswoman for the Office of Insurance Regulation, pointed out that the office’s optimism stems back to the aftermath of hurricanes Helene and Milton last year when “there was no widespread, significant rate increases filed by private carriers.” Instead, companies filed for rate decreases 73 times and for 0% rate increases 94 times since then, she said.

Coming off of a rare hurricane season with zero impact on the eastern United States, forecasters are expecting reductions in the cost of reinsurance — insurance that insurers buy — to help drive down premiums over the next year, Elliott said.

Reinsurance costs roughly consume 30% to 50% of consumers’ insurance premium dollars, according to various estimates from insurance industry leaders.

“Multiple reinsurers are also publicly expressing confidence in our market and we are optimistic that these savings will be passed on to policyholders,” she said.

Stacey Giulianti, chief legal officer for Windward Risk Managers, pointed out that subsidiary Florida Peninsula applied for rate reductions of around 8% for homeowner policies  and 12% for condo unit policies over the summer.

They won’t take effect until April 2026, “which means that customers will start to see these reductions go through at that time and for 12 months after that,” he said.

But regarding how much the company’s rate decreases will drive down its customers’ premiums, he said, “I cannot predict what the cost decrease will be because (a) inflation may push the value of the home up in terms of repairs costs, and (b) individual customers add or change coverages, upgrade packages, add animal protection, etc.”

Ron Hurtibise covers business and consumer issues for the South Florida Sun Sentinel. He can be reached by phone at 954-356-4071 or by email at [email protected].

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